AcadeMedia AB (Buy, TP: SEK61.00) - Board adding uncertainty
We see a risk that 2023 school voucher price adjustments will not fully offset cost inflation, which has led us to cut our 2022/23–2024/25e EPS by 10–5%. The case benefits from a solid demand outlook and attractive valuation (2022/23–2024/25e FCF yield of 16–22%), but lacks catalysts, with its Board doing little to counter the ‘value trap’ arguments. We reiterate our BUY but have lowered our target price to SEK61 (90), resetting the valuation base, now a 30% discount to its historical NTM valuation, reflecting the current market trends.AcadeMedia AB is a Sweden-based holding company, which operates through its subsidiaries, primarily via AcadeMedia Group AB. It provides educational services and specializes in preschools, compulsory schools, upper secondary schools and adult education centers, among others. AcadeMedia Group AB has facilities all over Sweden, as well as preschools in Norway and Germany. Its brands include Framtidsgymnasiet, Hermods, Pysslingen, Plushogskolan, Espira, Vittra and NTI-gymnasiet, among others. The adult education sector is engaged in provision of various trainings, such as Swedish for Immigrants (SFI), Information Technology (IT), marketing and logistics, among others. AcadeMedia AB's main shareholders comprise Mellby Gard AB, Marvin Holding Ltd and Nordea Funds Ltd.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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